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By Marc von Grundherr

Director, Benham and Reeves


Canapes and Cheque Books For Landlords?

I hope you weren’t holding your breath for the Chancellor to announce a package of help for landlords in his Spring Statement? If you were, you’ll have approached a state of asphyxiation for nothing I’m afraid.  

There were few breadcrumbs for the private rental sector in Rishi Sunak’s speech and all of the oppressive stuff announced in recent months and years seem set to stay - no respite on the absence of higher rate tax breaks on buy to let mortgages, no reversal of the 3% stamp duty penalty and nothing from him at all to remedy the Government's outrageous view that landlords should not be protected from the cladding scandal and its hideous remedial costs.

The breadcrumbs, as they are, amount to just the benefit of the removal of VAT on a number of retrofit items that count toward increasing the energy efficiency of homes. The 5% reduction is no kick in the teeth especially when we face the prospect of having to adapt our portfolios so that they fit an EPC ‘C’ rating in the not too distant future and at a cost estimated as being as high as £10,000 per property on average. 


But that was it and of course for those that hold their businesses under the banner of a limited company, you’ll soon be paying 24% corporation tax and not 19% - yes, that policy stays too and one that seems to me rather more Corbyn/McDonnell than it does Johnson/Sunak.

Yet I still maintain that buy-to-let is a smart investment, all things considered. And reading recent research from the Property Investor Show on a number of asset classes’ performance versus residential property performance with property still coming out well, my enthusiasm for capital appreciation as well as yield remains.

But all that said, the treatment by Whitehall of investors in the PRS is pretty disappointing given that we now prop up the country’s lack of social housing supply, something that has been neglected by successive administrations for decades. 

Back in the mid 1950’s under Macmillan, the UK provided 198,000 council houses each year. The average figure in recent years has plummeted to around 26,000 a year including all social housing providers (we build barely 5000 actual council houses each year now). 

In the 1970’s the percentage of all homes rented from local authorities and/or social housing providers was 31%. Now it’s 17%.

At the same time, demand for affordable and social housing remains sky high with 1,187,641 households on waiting lists across the country in 2021 (Source: ONS). No wonder, given that our population has grown from 50,000,000 during Macmillan’s time to 67,000,000. Worryingly for housing provision, growth is forecast to be 72,000,000 people by 2041.

And who fills this gap? We do of course. 


So my message to Rishi Sunak and his hard partying boss is one of caution in that if current and prospective landlords continue to be treated as pariahs and cash-cows, they and their successors should not be surprised if many such investors do start to think about throwing in the towel.

Instead, surely it is sensible (not to mention appropriately grateful), to consider those that underpin private rental supply as a sector to be supported and appreciated as opposed to it being a case of biting the hand that feeds it?

As this piece began however, we shouldn’t hold our breath for the canapes and cheque books to be wheeled out of number 11 Downing Street just yet, sadly.  

* Marc von Grundherr is a buy-to-let landlord and is Director at Benham and Reeves, the 18 branch London estate and lettings agency * 

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    I'm not expecting any help, quite the reverse, at the end of the day though it's the tenants that pay the price for all this


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